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In 1938, Nazi Germany coveted (the modern) Czech [Republic] in large part for its Skoda Works which produced something like one-quarter of the arms and ammunition used by the Third Reich.

From what I understand, the Skoda Works produced all, or essentially all of the armaments for the Austro-Hungarian Empire, meaning that what we now call the "Czech Republic" (9-10 million people) had a military importance way out of proportion to their population in the Austro-Hungarian Empire, or in Europe.

Why did Austria-Hungary choose to concentrate its arms manufacturing capability in this place? Were the nearby mountains particularly good sources of raw material for weapons? Was there a concentration of miners/metalworkers, engineers in this area? Was this a remote area in the hills that was easy to defend? Why didn't Austria-Hungary diversify its arms procurement between two or more sources?

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Plzeň, where Škoda Works was founded, was not in Sudetenland. Very near, but not in. Also, it's west of Prague, while the Sudetes are on the other side of the country, about 250Km away from Plzeň, on the borders with Poland. –  Yannis Rizos Sep 16 '13 at 2:06
    
@YannisRizos:OK, changed Sudetenland to Plzeň in title. –  Tom Au Sep 16 '13 at 12:39
    
There are a number of assumptions within the last paragraph that deserve examination. Why did concentration take place? Perhaps because monopoly is a natural tendency? Why didn't Austria-Hungary do a better job..." Why should they? What is the policy goal of diversifying procurement? These aren't wrong they're just very broad and weakly supported. I only point this out because they may conceal some very interesting questions (or they may not). –  Mark C. Wallace Sep 16 '13 at 13:58
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@MarkC.Wallace: I'm planning a follow up question on some underlying issues, which (hopefull) will be "very interesting." –  Tom Au Sep 16 '13 at 14:14
    
I edited the question for clarity. –  Tom Au Sep 20 '13 at 20:34

2 Answers 2

up vote 7 down vote accepted

You have asked several questions. I will address directly your first one, based on what I have now researched, although this answer also encompasses some of your additional points:

Why did this concentration of arms manufacturing capability take place?

See Skoda Works: (www.globalsecurity.org/military):

Emil Škoda Emil Škoda

The fortunes of the Skoda Works were interwoven with those of Plzen through several generations of employees. The Skoda factories were founded by Count Wallenstain in 1859. Count Wallenstein-Vartenberk set up a branch of his foundry and engineering works in Plzen...

Emil Škoda, a highly competent engineering expert and dynamic entrepreneur, became the Chief Engineer of the factory which had more than a hundred employees...

In 1869 it was taken over by Emil Skoda, the Czech engineer, who employed 130 people. Emil Skoda purchased the factory from Count Waldstein for 167000 gulden with money borrowed from his physician uncle in Vienna, Josef Skoda the great Viennese clinician. Skoda had originally been employed in the iron works of Wallentein (Valdstejn) in Pilsen...

When engineer Emil Skoda purchased a small engineering works located in the center of Plzen, then a town with a population of 30,000, he set out on a path leading to the major development of his plant and fame for Plzen around the world.The coalfields at nearby Nýrany and local iron-ore deposits gave rise in the 19th century to Plzen's engineering industry, symbolized by the Skoda Works, which occupy most of the city's western sector.

By 1914 Skoda was one of Europe's major arms producers. At the Skoda Works in Pilsen everything was done on an enormous scale - grounds covered, trip hammers of a hundred tons apiece, 30,000 men toiling and sweating for good pay; and capital galore. And enormous profits; during the Great War one of the Krupps became a partner. A Czech, Baron Skoda, was the brain of the concern, and a number of able German engineers were the sub-brains.

Based on this account, we see the important factors that led to Skoda Works's enormous success:

  • Perhaps some good political connections: The Skoda factories were founded by Count Wallenstein-Vartenberk of the notable House of Waldstein.
  • A highly competent engineering expert and dynamic entrepreneur in the person of Emil Skoda: Excellent technical knowledge combined with business acumen in one individual, giving them the ability to both envision and successfully implement a large and successful technical/industrial enterprise like the Skoda Works. Supra: Czechs like Emil Skoda and Tomas Bata [the shoemaker] became symbols of the new Czech capitalists. This is an oft-repeated pattern, reminiscent of figures such as Thomas Edison. an American inventor and businessman; Bill Gates, an American business magnate, investor, programmer,inventor; and Larry Ellison, an American business magnate, co-founder and chief executive of Oracle Corporation, among numerous others.
  • The close proximity of important natural resources for the business in question: coalfields at nearby Nýrany and local iron-ore deposits
  • A deep and capable human resource pool suitable for the business: a number of able German engineers were the sub-brains.
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A good (upvoted) answer. Certainly explains why they built at that site. But the implicit question is, "weren't the above conditions present elsewhere in the Austro-Hungarian empire that would have caused them to build a second site? –  Tom Au Sep 16 '13 at 12:50
    
@TomAu - "weren't the above conditions present elsewhere..." Perhaps some of the necessary conditions were present in other places, but Emil Škoda, the prime mover of the enterprise, was not. Appropriate conditions for something to arise are often present in many places. Appropriate people? Not so much... –  user2590 Sep 16 '13 at 15:30
    
@MarkC.Wallace:I tried to answer only the question I mentioned. But the link I provided answers most of yours as well. Particularly, it's clear that Skoda Works was a private enterprise, financed by Skoda and other private investors: Czech financiers played a significant role in the development of heavy industry. Emil Skoda became the major arms producer in the Habsburg Empire. Czechs like Emil Skoda and Tomas Bata became symbols of the new Czech capitalists . The A-H Empire was their biggest customer, but they also had others. Similar perhaps to a firm like Lockheed-Martin in the USA. –  user2590 Sep 16 '13 at 15:38
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To Mark C. Wallace's "prior comment." there were trivial exports from the Skoda Works, and trivial imports from elsewhere. But the key point was that by accident (or design) the Skoda Works' capacity closely matched Austria-Hungary's needs, hence no need for a second plant. That comment contained the answer (and should not have been removed). –  Tom Au Sep 16 '13 at 16:04
    
One important consideration was that this project was undertaken at the initiative of Mr. Skoda, who put forth his terms. It's NOT like the Austro-Hungarian government put out an RFP ((Request for proposal) and said, "let's take the top two." –  Tom Au Sep 20 '13 at 20:36

This is a compendium of what I've learned from the other answer and the comments.

There were several natural advantages of the Pilsen location, pointed out in detail by Vector; abundant raw materials and suitable labor nearby, and the presence of enterpreneur Emil Skoda, a "native son."

Mark C. Wallace asked an important question in a comment (since deleted) about how far the Skoda Works matched Austria-Hungary's needs. The answer was, "pretty closely," which meant that there wasn't a need for a second plant.

One important consideration was that this project was undertaken at the initiative of Mr. Skoda, who put forth, and got his terms. It's not like the Austro-Hungarian government put out an RFP ((Request for proposal) and said, "let's take the top two," as the American government might, given its concerns about anti-trust issues. On the other hand, the Austro-Hungarian government didn't "push back" on Mr. Skoda to diversify by building a second plant elsewhere.

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